Investing.com - Johnson & Johnson (NYSE:JNJ) reported strong third-quarter earnings results Tuesday, helped by a revenue gain of nearly 2%, just a day after it paused its Covid-19 vaccine trials.
J&J announced adjusted earnings per share of $2.2, a gain of 3.8%, on revenue of $21.08 billion, up 1.7%. Analysts polled by Investing.com expected EPS of $1.96 on revenue of $20.15 billion.
J&J also increased its guidance for its full year reported sales by $1.0 billion and adjusted EPS by $0.15, driven by the strength of the recovery and strong underlying business fundamentals.
At 7 AM ET (11:00 GMT), shares in J&J dropped 1.2% premarket despite the positive result, given the pause in its Covid-19 vaccine trial. J&J shares are up 4% from the beginning of the year, outperforming the Dow Jones Industrial Average, which is up 1.1% from the start of the year.
“Our third-quarter results reflect solid performance and positive trends across Johnson & Johnson, powered by better-than-expected procedure recovery in Medical Devices, growth in Consumer Health, and continued strength in Pharmaceuticals,” said Alex Gorsky, Chairman and Chief Executive Officer.
Breaking down the divisions, Pharmaceuticals starred, growing by 5% on the quarter, Consumer Health gained 1.3%, while Medical Devices dropped 3.6%. This decline was primarily driven by the negative impact of the Covid-19 pandemic and the associated deferral of medical procedures, but this represented a substantial rebound after the sector dropped over 33% last quarter.
"The current public-health environment further strengthens J&J’s position, where it’s benefiting from strong demand for its over-the-counter products. J&J makes everything from innovative cancer therapies, to medical devices and over-the-counter staples, like pain reliever, Tylenol," said Haris Anwar, an analyst at Investing.com
"In this general upbeat environment for healthcare giants, one of the biggest concerns for investors is how quickly the company normalizes its medical devices business. Revival in this unit will be a positive sign for the stock which is trading near a record level. But for all of its strengths, the company's hefty valuation leaves it little room for error."
The healthcare conglomerate late Monday said it had temporarily paused its Covid-19 vaccine candidate clinical trials due to an unexplained illness in a study participant, delaying one of the highest profile efforts to contain the global pandemic.
J&J shares are up 4% from the beginning of the year, still down 3.29% from its 52 week high of $157.00 set on April 23. They are outperforming the Dow Jones which is up 1.05% from the start of the year.
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